China became the world's largest solar PV market in Q3; nation is poised to additional multi-GW deployment

In October 2013 NPD Solarbuzz Inc. (Santa Clara, California, U.S.) published a new analysis which estimates that China represented 25% of the 9 GW of solar photovoltaic (PV) demand in the third quarter of 2013.

“The emergence of China in driving PV demand is impacting both global end-market figures and is also having a profound impact on the financial health of the remaining domestic suppliers,” Solarbuzz Senior Analyst Michael Barker comments. Solarbuzz estimates that China's share of global demand will more than double in 2013 as compared to 2011, when it was 10%.

Plans for 12 GW of new solar PV in 2014

In November 2013 China's Bureau of Energy has released a draft plan for 12 GW of solar photovoltaic (PV) deployment in 2014, according to NPD Solarbuzz. This includes 8 GW of distributed generation. Jiangsu will be the leading province, with 1.3 GW of PV in its pipeline, followed by Shandong Province at 1.2 GW and Zhejiang Province at 1.1 GW. These plans show a shift in emphasis towards rooftop PV and to densely populated Eastern China from the far Western regions.

National PV feed-in-tariff revised, effective since September 1st, 2013

In August 2013 the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) announced a new set of Feed-in-Tariffs (FIT) for photovoltaic systems to become effective from September 1st, 2013.

The level of the new FIT is determined by the level of the solar irradiation in a given location throughout the entire country and features three different levels for ground-mounted systems.

In an attempt to prevent further future stress on the existing grid infrastructure in the country the central government additionally introduced a new FIT for projects designed to feature distributed power generation (DG).

In this context, already last year the State Grid Corporation released in a statement that such projects aiming at both on-site generation and on-site consumption with a capacity of up to 6 MW will be exempted from paying any grid connection fee. The new FIT applicable for both types of power generation projects will be granted for 20 years according to the official notification.

Early January NDRC announced 10 GW of PV power generation capacities will be installed in 2013. However, given the fact that the revised FIT support scheme came into effect relatively late, caused by the ongoing bilateral negotiations between China and the European Commission (EC) concerning the solar trade dispute, AECEA expects rather a deployment of 6-7 GW, and under an optimistic scenario 7-8 GW will be installed. Ground-mounted or utility-scale PV power plants will continue to dominate the Chinese market; however by Q1-2/2014 the effect of the central government’s decision to encourage distributed projects will be clearly visible.

China plans to create further PV demand in the building sector until 2015

Early in August 2013 the State Council of China published comprehensive policy measures designed to further support the development domestic green industries. Accordingly, by the end of 2015 the total output value of the Chinese environmental protection industry shall amount to approx. EUR 54 billion.

BIPV is an appropriate technology for energy-saving buildings.

In the context of the so-called “Green Building Sector” by 2015 approx. 60 million square meters of mainly public buildings shall be turned into energy-saving buildings, and solar energy applications are the only renewable energy technology explicitly stipulated as a means of decentralized / distributed power generation in the official policy document.

US based manufacturer of Low Concentrating Photovoltaic (LCPV) modules Solaria teamed up with local Chinese power utilities earlier this year, in order to develop 3 projects with capacities ranging from 500 kWp to 2 MWp, spread across two provinces in Western China.

All systems have been connected to the grid since September / October 2013.

AECEA feels confident that the successful implementation of these three demonstration PV projects will not only help Solaria, but as well create opportunities for other international CPV players to further tap the domestic Chinese PV market in future.

On September 16, 2013 the Ministry for Industry and Information Technology (MIIT) published an official notification outlining regulations and standards designed to ensure a more sustainable and healthy development of China’s PV Industry. Among these new regulations and standards are:

- Strictly control the expansion of existing production capacities

- Any form of production expansion requires a share of private equity of 20%

- An annual budget earmarked for R&D shall be equivalent to 3% of the companies turnover, but no less than approx. EUR 1.2 million / annually

- Minimum requirements for production capacities along the entire value chain

- Environmental Benchmarks for finished products to be met during production

- Benchmarks in terms of cell efficiencies for all types of solar cells

- Requires compliance with a host of corresponding standards and mandatory certification schemes

Overall, the intention is that only the most competitive companies shall prevail, that only high-efficient products shall leave factory gates, and that only those companies who can afford to spend the mandatory EUR 1.2 Mio / annually for R&D undertakings shall sustain whereas others may simply exit the market.

In this context, AECEA remains highly cautious with its forecast by when these requirements will actually result in any form of consolidation and/or reduction of existing production capacities since many other industries in China (e.g. steel, cement, pulp & paper, textile, automobile) have been chronically facing similar issues for several years already and to date the central government achieved a mixed success in addressing the prevailing over-capacities in these industrial sectors. AECEA expects the “desired” industry consolidation to take another 3-5 years.

PV manufacturers are subject to new 50% VAT rebate

According to a notification issued by the Ministry of Finance (MOF), as of October 1, 2013 operators of solar PV power plants are eligible for a 50% VAT refund/rebate until December 31, 2015. The instruction to grant a 50% rebate was decided by the State Council earlier. The termination of the VAT rebate coincides with the end of the 12th Five-Year-Plan Period (2011-2015). Today China’s VAT amounts to 17% and a 50% reduction will certainly improve financial returns of companies operating in the downstream sector in particular. However, at this stage further details on how the VAT rebate will be implemented remains vague. AECEA expects that guidelines about how to apply will be released shortly.

Latest technologies, national and international policies, market insights at Intersolar China 2014

From March 26th–28th, 2014 the third Intersolar China will be the major platform for the Asian solar markets.

In 2014, Intersolar China is being held in conjunction with CIPV EXPO and Clean Energy Expo China (CEEC) for the first time. CIPV EXPO, as an integral part of CEEC, is the first and only solar industry trade show organized in cooperation with China’s leading utility companies such as the State Grid Corporation of China, China Southern Power Grid, China HuaNeng Group, and China DaTang Group.

Exhibition visitors benefit in particular from this fusion, as in addition to Intersolar China and CIPV Expo, their ticket provides entry to all of Clean Energy Expo China’s exhibitions: Solar Thermal China, Wind Power China, Bio-Energy China and GridTec China.

Around 380 exhibitors are expected at the China International Exhibition Center (CIEC) in Beijing to present the latest developments in the fields of photovoltaics, PV production technologies, energy storage systems and solar thermal technologies on a total exhibition area of 13,000 square meters.

Image: Intersolar China

600 conference attendees expected

During the three-day conference in Beijing’s Kempinski Hotel, 70 industry experts speak about developments in international solar markets to over 600 attendees, with the event focusing in particular on the development of the Chinese market, large PV installations, distributed generation and industrial and commercial uses of roof-mounted photovoltaic systems.